Addressing climate change necessitates significant expansion of wind power. Arvo Sijoitusosuuskunta, an investment cooperative, along with Korkia, an investment and consulting firm under the Arvo group, partnered with Semecon, a local developer based in Ylivieska, to advance wind energy in Northern Ostrobothnia with a robust local approach.
As a result of the collaboration, Vasama wind farm in Ylivieska has been initiated so far. Kenkäkangas wind farm in Sievi and Peuraneva wind farm in Siikalatva are in the planning phase.
“I dare to say that in these projects, the level of local involvement will be the highest in Finland,” says Olli Malkamäki, CEO of Semecon.
The mutual role allocation among the parties is such that Semecon handles the planning and development, Korkia has introduced a private equity investment fund focusing on renewable energy development to finance the projects, with Arvo acting as an anchor investor with a commitment of three million euros.
Malkamäki notes that the project development has progressed rapidly, with approximately 500 megawatts of wind power already in development as of February. The Kenkäkangas project is estimated to be around 350 megawatts, Vasama approximately 100 megawatts, and Peuraneva about 50 megawatts. In terms of euros, the figures representing the projects are substantial if they are realized in their planned sizes. For instance, investments in the Kenkäkangas project are estimated to reach around 400 million euros, and in the Vasama wind farm, approximately 150 million euros. The Vasama project is the most advanced, with financing decisions already made by the Korkia fund.
Malkamäki emphasizes that these projects have significant economic impacts both during their development and construction phases, as well as after completion, highlighting the positive effects of wind power on the region’s vitality.
According to the Wind Power Association, for example, the 64 wind turbines producing renewable energy in Kalajoki in 2020 generated €1.6 million in property taxes that year alone. Based on Malkamäki’s calculations, the Kenkäkangas wind farm would generate property tax revenue of €40-50 million for the municipality of Sievi over its lifecycle, depending on the final scale of the wind farm.
Wind farm projects are economically significant for their respective areas, says Olli Malkamäki.
“Significant profit potential during the project development phase.”
The Korkia Renewable Energy Ky fund also offers non-professional investors the opportunity to invest in renewable energy. This fund has a five-year investment horizon, making it suitable for individual investors as well.
According to Korkia’s CEO, Pauli Mäenpää, the fund specifically invests in project development and companies focused on it, such as Semecon.
“Our experience indicates that investments during the project development phase typically yield an average annual return of over 10%, provided that the project portfolio is sufficiently diversified. Similarly, investments in the construction and operation phases typically yield annual returns of 5–8% over the long term. The investment horizon for project development phase investments is typically much shorter, around 2–4 years, making it an attractive investment target for the fund,” says Mäenpää.
The subscription period for the fund is ongoing and is expected to continue until the end of the current year.
“This is an extremely significant and important project for us, which is at the core of Korkia’s activities and strategy. I believe that the fund will accumulate tens of millions of euros. This will enable us to develop a significant amount of wind and solar power in Finland as well.”
In terms of energy production capacity, he states that Olkiluoto 3’s capacity (1.6 gigawatts) can be used as a point of comparison.
“Our new fund’s financed and developed wind and solar power plants will exceed this capacity.”
Korkia’s CEO Pauli Mäenpää says that Korkia is able to develop a significant amount of wind and solar power in Finland as well.
TEXTS JORMA UUSITALO
IMAGES ESA MELAMETSÄ